The article lists several changes to applets and the Java plug-in that are meant to revitalize the technology:

Improved reliability

Improved user experience

Applets launch in the background

Built-in JNLP support

Per-applet command line arguments

Heap size, Java 2D API acceleration options

Improved Java/JavaScript programming language integration

Improved Windows Vista support

Signed applets now work correctly in Protected Mode Internet Explorer

The article goes on to highlight what the authors consider to be the most significant change:

The most significant new feature of the next-generation Java Plug-in is built-in support for launching applets from JNLP files. Using the JNLP file format as the applet descriptor allows applets to instantly reuse JNLP extensions previously written for Java Web Start applications, and significantly expands the capabilities of applets in many other ways.

This new design has several implications regarding Java applet usage in the future. After this release, customizations previously only available with Java Web Start will be made available in Java applets as well. Included in that list are:

Part of this change includes per-applet JVMs; applets running as a separate process. Java applets will no longer run as part of the browser's process, protecting the browser from applet performance issues (and vice-versa), and also allowing for better JVM management by the applet itself.

Pivot, as a platform, is meant to directly compete with Flex and Silverlight as a rich-client that is embeddable directly in the browser. The Pivot developers consider part of that platform to be Java 6 update 10 (also known as the consumer JRE).

Similarly, JavaFX, a new scripting language technology from Sun is also relying on the new Consumer JRE, and is targeted to compete in the rich internet application space next to Flex and Silverlight. InfoQ has a number of articles covering the changes occurring with JavaFX.

InfoQ will continue to report on new information and milestones regarding Java 6 update 10, and the impacts to Java in the RIA space.

Still, in the file layout distro of jdk7, I can't find the next generation plugin. Any idea why it's not bundled?

Congrats to Sun for the new plugin anyway. I'm not sure it's not too late though to make a come back in the RIA space. But I would definitely prefer to use Java for RIA rather than say learning Flash or Silverlight if ever that plugin becomes mainstream.

Michael,lopica.sourceforge.net/faq.html has some old time bugs and workarounds. Really the end users have a hard time installing and running applets and webstart.After the issues are fixed and released, then sometime after people start adopting, and after some time of adoption there's enough of installed base of end users for developers to target. Most optimistically, Sun will not solve w/ current resource commitment this decade. For sun to say we won't support FF 2 or apple is silly.

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